Equinix Reports Fourth Quarter And Full Year 2019 Results
- Delivered 2019 annual revenues increase of 10% year-over-year to
$5.562 billion . This reflects a 9% year-over-year increase on a normalized and constant currency basis - Named a leader in the first-ever IDC MarketScape report for Worldwide Colocation and Interconnection Services
- Customer deployments across multiple metros increased to 87% of total recurring revenues, demonstrating the value of the
Equinix global platform - Appointed
Adaire Fox-Martin to Board of Directors
2019 Results Summary
- Revenues
$5.562 billion , a 10% increase over the previous year or a normalized and constant currency increase of 9%- Operating Income
$1.170 billion , a 20% increase over the previous year, and an operating margin of 21%- Adjusted EBITDA
$2.688 billion , a 48% adjusted EBITDA margin- Includes
$9 million of integration costs - Net Income and Net Income per Share attributable to
Equinix $507 million , a 39% increase over the previous year$5.99 per share, a 31% increase over the previous year- AFFO and AFFO per Share
$1.931 billion , a 16% increase over the previous year or 13% on a normalized and constant currency basis$22.81 per share, a 10% increase over the previous year or 8% on a normalized and constant currency basis- Includes
$9 million of integration costs
2020 Annual Guidance Summary
- Revenues
$6.000 - $6.050 billion , an 8 - 9% increase over the previous year, both on an as-reported and normalized and constant currency basis- Adjusted EBITDA
$2.858 - $2.908 billion , a 48% adjusted EBITDA margin- Assumes
$10 million of integration costs - AFFO and AFFO per Share
$2.108 - $2.158 billion , an increase of 9 - 12% over the previous year or a normalized and constant currency increase of 11 - 14%$24.42 - $25.00 per share, an increase of 7 - 10% over the previous year or a normalized and constant currency increase of 9 - 11%- Assumes
$10 million of integration costs
Quote
"2019 was a great year for
Business Highlights
Equinix continues to progress its vision to evolve Platform Equinix® into a global platform that interconnects and integrates global businesses at the digital edge. OnJanuary 14, 2020 ,Equinix announced it signed a definitive agreement to acquire Packet, the leading bare metal automation platform.Equinix intends to leverage the Packet offering to accelerate the development and delivery of its interconnected edge services. By integrating Packet's innovative and developer-oriented bare metal service offering,Equinix intends to create a world-class, enterprise-grade bare metal offering that will allow customers to rapidly deploy digital infrastructure, within minutes, at global scale.- In January,
Equinix was named a leader in IDC's first-ever assessment of the colocation and interconnection services vendor market using the IDC MarketScape model. The IDC MarketScape report for Worldwide Colocation and Interconnection Services 2019-2020 vendor assessment (doc #US4517419,December 2019 ) is a key milestone in the evolution of the data center and networking industry, as it reflects the demand for colocation and interconnection. The recognition ofEquinix as a leader in this report underscores the value of Platform Equinix and highlights the competitive advantages thatEquinix has over its competitors. Equinix continued to expand the reach of its global platform and currently operates across 55 metros in 26 countries including the recently completed acquisition of three Axtel data centers that serve two new strategic technology metros inMexico . And, the company plans to build out new markets inHamburg and Muscat this year. The benefit of this unparalleled reach is reflected in strong cross-regional activity with customer deployments across multiple metros increasing to 87% of total recurring revenues.- Interconnection revenues grew 13% year-over-year on an as-reported basis and 14% on a normalized and constant currency basis, driven by strong customer response to Equinix Cloud Exchange Fabric™ (ECX Fabric™), good traction in new internet exchange markets, and solid interconnection net adds. Today,
Equinix has the most comprehensive global interconnection platform, now comprising over 363,000 physical and virtual interconnections. The company delivered its twelfth consecutive quarter of adding more interconnections than the rest of its top 10 competitors combined. In Q4,Equinix added an incremental 7,400 interconnections, fueled by high gross adds from new streaming services, expanding inter-metro connections, and seasonably lower churn. Peak internet exchange traffic grew by 10% this quarter, helped by new OTT video offerings. Equinix achieved its second best gross and net bookings this quarter with strong performance across all three regions (Americas , EMEA andAsia-Pacific ) and notable momentum inAsia-Pacific . In 2019,Equinix closed over 17,000 deals, demonstrating the tremendous scale of the company's go-to-market engine and the differentiated nature of theEquinix value proposition. In Q4,Equinix achieved a record number of new wins across multiple verticals. The content and digital media vertical experienced record bookings led byAsia-Pacific and strength in the gaming, publishing and eCommerce sectors as digital transformation continues to shape this vertical. The financial services vertical achieved its third highest bookings led by capital markets providers and multinational financials as cloud adoption accelerates.Equinix continues to make significant progress with the company's hyperscale strategy with six announced projects underway across all three regions and a strong pipeline of customer demand. In Q4,Equinix announced the completion of the formation of the greater thanUS$1.0 billion joint venture in the form of a limited liability partnership with GIC,Singapore's sovereign wealth fund, to develop and operate xScale™ data centers inEurope .Equinix is advancing additional joint venture conversations inJapan and other targeted geographies.Equinix's financial strength remains a significant and strategic advantage.Equinix leveraged the company's newly achieved investment-grade rating to reduce its interest burden as demonstrated by raising$2.8 billion in debt during Q4 to refinance a portion of the company's outstanding high-yield debt at more favorable rates.
Business Outlook
For the first quarter of 2020,
For the full year of 2020, total revenues are expected to range between
The U.S. dollar exchange rates used for 2020 guidance, taking into consideration the impact of our current foreign currency hedges, have been updated to
The adjusted EBITDA guidance is based on the revenue guidance less our expectations of cash cost of revenues and cash operating expenses. The AFFO guidance is based on the adjusted EBITDA guidance less our expectations of net interest expense, an installation revenue adjustment, a straight-line rent expense adjustment, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, income tax expense, an income tax expense adjustment, recurring capital expenditures, other income (expense), (gains) losses on disposition of real estate property and adjustments for unconsolidated joint ventures' and non-controlling interests' share of these items.
Q4 2019 Results Conference Call and Replay Information
A replay of the call will be available one hour after the call, through
Investor Presentation and Supplemental Financial Information
Additional Resources
About
Non-GAAP Financial Measures
In presenting non-GAAP financial measures, such as adjusted EBITDA, cash cost of revenues, cash gross margins, cash operating expenses (also known as cash selling, general and administrative expenses or cash SG&A), adjusted EBITDA margins, free cash flow and adjusted free cash flow,
In addition, in presenting the non-GAAP financial measures,
Non-GAAP financial measures are not a substitute for financial information prepared in accordance with GAAP. Non-GAAP financial measures should not be considered in isolation, but should be considered together with the most directly comparable GAAP financial measures and the reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
Investors should note that the non-GAAP financial measures used by
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the challenges of acquiring, operating and constructing IBX data centers and developing, deploying and delivering
EQUINIX, INC. |
|||||||||||||||||||
Condensed Consolidated Statements of Operations |
|||||||||||||||||||
(in thousands, except per share data) |
|||||||||||||||||||
(unaudited) |
|||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||||||
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|||||||||||||||
Recurring revenues |
$ |
1,337,977 |
$ |
1,319,336 |
$ |
1,230,318 |
$ |
5,238,186 |
$ |
4,776,502 |
|||||||||
Non-recurring revenues |
79,158 |
77,474 |
79,765 |
323,954 |
295,152 |
||||||||||||||
Revenues |
1,417,135 |
1,396,810 |
1,310,083 |
5,562,140 |
5,071,654 |
||||||||||||||
Cost of revenues |
725,636 |
704,339 |
670,935 |
2,810,184 |
2,605,475 |
||||||||||||||
Gross profit |
691,499 |
692,471 |
639,148 |
2,751,956 |
2,466,179 |
||||||||||||||
Operating expenses: |
|||||||||||||||||||
Sales and marketing |
160,556 |
161,574 |
161,804 |
651,046 |
633,702 |
||||||||||||||
General and administrative |
245,504 |
241,812 |
206,146 |
935,018 |
826,694 |
||||||||||||||
Transaction costs |
16,545 |
2,991 |
481 |
24,781 |
34,413 |
||||||||||||||
Impairment charges |
(233) |
1,189 |
— |
15,790 |
— |
||||||||||||||
Gain on asset sales |
(43,847) |
(463) |
— |
(44,310) |
(6,013) |
||||||||||||||
Total operating expenses |
378,525 |
407,103 |
368,431 |
1,582,325 |
1,488,796 |
||||||||||||||
Income from operations |
312,974 |
285,368 |
270,717 |
1,169,631 |
977,383 |
||||||||||||||
Interest and other income (expense): |
|||||||||||||||||||
Interest income |
7,532 |
8,201 |
3,002 |
27,697 |
14,482 |
||||||||||||||
Interest expense |
(117,617) |
(118,674) |
(129,978) |
(479,684) |
(521,494) |
||||||||||||||
Other income |
12,336 |
3,428 |
4,498 |
27,778 |
14,044 |
||||||||||||||
Gain (loss) on debt extinguishment |
(52,758) |
315 |
(12,163) |
(52,825) |
(51,377) |
||||||||||||||
Total interest and other, net |
(150,507) |
(106,730) |
(134,641) |
(477,034) |
(544,345) |
||||||||||||||
Income before income taxes |
162,467 |
178,638 |
136,076 |
692,597 |
433,038 |
||||||||||||||
Income tax expense |
(37,632) |
(57,827) |
(26,054) |
(185,352) |
(67,679) |
||||||||||||||
Net income |
124,835 |
120,811 |
110,022 |
507,245 |
365,359 |
||||||||||||||
Net loss attributable to non-controlling interests |
160 |
39 |
— |
205 |
— |
||||||||||||||
Net income attributable to Equinix |
$ |
124,995 |
$ |
120,850 |
$ |
110,022 |
$ |
507,450 |
$ |
365,359 |
|||||||||
Net income per share attributable to Equinix: |
|||||||||||||||||||
Basic net income per share |
$ |
1.47 |
$ |
1.42 |
$ |
1.37 |
$ |
6.03 |
$ |
4.58 |
|||||||||
Diluted net income per share |
$ |
1.46 |
$ |
1.41 |
$ |
1.36 |
$ |
5.99 |
$ |
4.56 |
|||||||||
Shares used in computing basic net income per share |
85,289 |
85,012 |
80,509 |
84,140 |
79,779 |
||||||||||||||
Shares used in computing diluted net income per share |
85,831 |
85,571 |
80,740 |
84,679 |
80,197 |
||||||||||||||
EQUINIX, INC. |
|||||||||||||||||||
Condensed Consolidated Statements of Comprehensive Income |
|||||||||||||||||||
(in thousands) |
|||||||||||||||||||
(unaudited) |
|||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||||||
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|||||||||||||||
Net income |
$ |
124,835 |
$ |
120,811 |
$ |
110,022 |
$ |
507,245 |
$ |
365,359 |
|||||||||
Other comprehensive income (loss), net of tax: |
|||||||||||||||||||
Foreign currency translation adjustment ("CTA") gain (loss) |
283,185 |
(284,927) |
(68,795) |
(58,334) |
(421,743) |
||||||||||||||
Unrealized gain (loss) on cash flow hedges |
(22,928) |
14,217 |
6,287 |
(3,842) |
43,671 |
||||||||||||||
Net investment hedge CTA gain (loss) |
(154,596) |
188,897 |
38,934 |
73,294 |
219,628 |
||||||||||||||
Net actuarial gain (loss) on defined benefit plans |
(22) |
(8) |
20 |
(48) |
55 |
||||||||||||||
Total other comprehensive income (loss), net of tax |
105,639 |
(81,821) |
(23,554) |
11,070 |
(158,389) |
||||||||||||||
Comprehensive income, net of tax |
230,474 |
38,990 |
86,468 |
518,315 |
206,970 |
||||||||||||||
Net loss attributable to non-controlling interests |
160 |
39 |
— |
205 |
— |
||||||||||||||
Other comprehensive (income) loss attributable to non-controlling interests |
(16) |
28 |
— |
19 |
— |
||||||||||||||
Comprehensive income attributable to Equinix |
$ |
230,618 |
$ |
39,057 |
$ |
86,468 |
$ |
518,539 |
$ |
206,970 |
EQUINIX, INC. |
|||||||
Condensed Consolidated Balance Sheets |
|||||||
(in thousands) |
|||||||
(unaudited) |
|||||||
December 31, 2019 |
December 31, 2018 |
||||||
Assets |
|||||||
Cash and cash equivalents |
$ |
1,869,577 |
$ |
606,166 |
|||
Short-term investments |
10,362 |
4,540 |
|||||
Accounts receivable, net |
689,134 |
630,119 |
|||||
Other current assets |
303,543 |
274,857 |
|||||
Total current assets |
2,872,616 |
1,515,682 |
|||||
Property, plant and equipment, net |
12,152,597 |
11,026,020 |
|||||
Operating lease right-of-use assets |
1,475,367 |
— |
|||||
Goodwill |
4,781,858 |
4,836,388 |
|||||
Intangible assets, net |
2,102,389 |
2,333,296 |
|||||
Other assets |
580,788 |
533,252 |
|||||
Total assets |
$ |
23,965,615 |
$ |
20,244,638 |
|||
Liabilities and Stockholders' Equity |
|||||||
Accounts payable and accrued expenses |
$ |
760,718 |
$ |
756,692 |
|||
Accrued property, plant and equipment |
301,535 |
179,412 |
|||||
Current portion of operating lease liabilities |
145,606 |
— |
|||||
Current portion of finance lease liabilities |
75,239 |
77,844 |
|||||
Current portion of mortgage and loans payable |
77,603 |
73,129 |
|||||
Current portion of senior notes |
643,224 |
300,999 |
|||||
Other current liabilities |
153,938 |
126,995 |
|||||
Total current liabilities |
2,157,863 |
1,515,071 |
|||||
Operating lease liabilities, less current portion |
1,315,656 |
— |
|||||
Finance lease liabilities, less current portion |
1,430,882 |
1,441,077 |
|||||
Mortgage and loans payable, less current portion |
1,289,434 |
1,310,663 |
|||||
Senior notes, less current portion |
8,309,673 |
8,128,785 |
|||||
Other liabilities |
621,725 |
629,763 |
|||||
Total liabilities |
15,125,233 |
13,025,359 |
|||||
Common stock |
86 |
81 |
|||||
Additional paid-in capital |
12,696,433 |
10,751,313 |
|||||
Treasury stock |
(144,256) |
(145,161) |
|||||
Accumulated dividends |
(4,168,469) |
(3,331,200) |
|||||
Accumulated other comprehensive loss |
(934,613) |
(945,702) |
|||||
Retained earnings |
1,391,425 |
889,948 |
|||||
Total Equinix stockholders' equity |
8,840,606 |
7,219,279 |
|||||
Non-controlling interests |
(224) |
— |
|||||
Total stockholders' equity |
8,840,382 |
7,219,279 |
|||||
Total liabilities and stockholders' equity |
$ |
23,965,615 |
$ |
20,244,638 |
|||
Ending headcount by geographic region is as follows: |
|||||||
Americas headcount |
3,672 |
3,480 |
|||||
EMEA headcount |
2,941 |
2,751 |
|||||
Asia-Pacific headcount |
1,765 |
1,672 |
|||||
Total headcount |
8,378 |
7,903 |
EQUINIX, INC. |
|||||||
Summary of Debt Principal Outstanding |
|||||||
(in thousands) |
|||||||
(unaudited) |
|||||||
December 31, 2019 |
December 31, 2018 |
||||||
Finance lease liabilities |
$ |
1,506,121 |
$ |
1,518,921 |
|||
Term loans |
1,282,302 |
1,337,868 |
|||||
Mortgage payable and other loans payable |
84,735 |
45,924 |
|||||
Plus: debt discount and issuance costs, net |
3,081 |
4,732 |
|||||
Total mortgage and loans payable principal |
1,370,118 |
1,388,524 |
|||||
Senior notes |
8,952,897 |
8,429,784 |
|||||
Plus: debt issuance costs |
78,030 |
75,372 |
|||||
Less: debt premium |
(1,716) |
(5,031) |
|||||
Total senior notes principal |
9,029,211 |
8,500,125 |
|||||
Total debt principal outstanding |
$ |
11,905,450 |
$ |
11,407,570 |
EQUINIX, INC. |
||||||||||||||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||||||||||||||
(in thousands) |
||||||||||||||||||||
(unaudited) |
||||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
||||||||||||||||
Cash flows from operating activities: |
||||||||||||||||||||
Net income |
$ |
124,835 |
$ |
120,811 |
$ |
110,022 |
$ |
507,245 |
$ |
365,359 |
||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||||||||
Depreciation, amortization and accretion |
328,295 |
321,746 |
305,130 |
1,285,296 |
1,226,741 |
|||||||||||||||
Stock-based compensation |
62,126 |
63,871 |
40,867 |
236,539 |
180,716 |
|||||||||||||||
Amortization of debt issuance costs and debt discounts and premiums |
3,613 |
3,196 |
3,009 |
13,042 |
13,618 |
|||||||||||||||
(Gain) loss on debt extinguishment |
52,758 |
(315) |
12,163 |
52,825 |
51,377 |
|||||||||||||||
Gain on asset sales |
(43,847) |
(463) |
— |
(44,310) |
(6,013) |
|||||||||||||||
Impairment charges |
(233) |
1,189 |
— |
15,790 |
— |
|||||||||||||||
Other items |
3,831 |
2,820 |
10,704 |
19,620 |
27,644 |
|||||||||||||||
Changes in operating assets and liabilities: |
||||||||||||||||||||
Accounts receivable |
96,480 |
3,331 |
32,195 |
(26,909) |
(52,931) |
|||||||||||||||
Income taxes, net |
(40,649) |
42,482 |
22,206 |
32,495 |
(10,670) |
|||||||||||||||
Accounts payable and accrued expenses |
(34,588) |
10,647 |
30,713 |
(27,928) |
35,495 |
|||||||||||||||
Operating lease right-of-use assets |
40,805 |
29,743 |
— |
149,031 |
— |
|||||||||||||||
Operating lease liabilities |
(40,032) |
(38,254) |
— |
(152,091) |
— |
|||||||||||||||
Other assets and liabilities |
(23,724) |
(61,810) |
(8,380) |
(67,917) |
(15,910) |
|||||||||||||||
Net cash provided by operating activities |
529,670 |
498,994 |
558,629 |
1,992,728 |
1,815,426 |
|||||||||||||||
Cash flows from investing activities: |
||||||||||||||||||||
Purchases, sales and maturities of investments, net |
(5,776) |
(2,905) |
1,402 |
(20,523) |
20,597 |
|||||||||||||||
Business acquisitions, net of cash and restricted cash acquired |
— |
— |
(502) |
(34,143) |
(829,687) |
|||||||||||||||
Purchases of real estate |
(104,865) |
(16,852) |
(45,806) |
(169,153) |
(182,418) |
|||||||||||||||
Purchases of other property, plant and equipment |
(714,561) |
(556,822) |
(680,665) |
(2,079,521) |
(2,096,174) |
|||||||||||||||
Proceeds from asset sales |
358,656 |
117 |
— |
358,773 |
12,154 |
|||||||||||||||
Net cash used in investing activities |
(466,546) |
(576,462) |
(725,571) |
(1,944,567) |
(3,075,528) |
|||||||||||||||
Cash flows from financing activities: |
||||||||||||||||||||
Proceeds from employee equity awards |
— |
24,425 |
33 |
52,018 |
50,136 |
|||||||||||||||
Payment of dividend distributions |
(210,360) |
(212,752) |
(183,858) |
(836,164) |
(738,600) |
|||||||||||||||
Proceeds from public offering of common stock, net of offering costs |
— |
99,421 |
114,299 |
1,660,976 |
388,172 |
|||||||||||||||
Proceeds from loans payable |
— |
— |
— |
— |
424,650 |
|||||||||||||||
Proceeds from senior notes, net of debt discounts |
2,797,906 |
— |
— |
2,797,906 |
929,850 |
|||||||||||||||
Repayment of finance lease liabilities |
(63,701) |
(19,673) |
(14,119) |
(126,486) |
(103,774) |
|||||||||||||||
Repayment of mortgage and loans payable |
(19,431) |
(17,584) |
(17,975) |
(73,227) |
(447,473) |
|||||||||||||||
Repayment of senior notes |
(2,056,289) |
— |
— |
(2,206,289) |
— |
|||||||||||||||
Debt extinguishment costs |
(43,311) |
— |
— |
(43,311) |
(20,556) |
|||||||||||||||
Debt issuance costs |
(23,341) |
— |
— |
(23,341) |
(12,218) |
|||||||||||||||
Other financing activities |
— |
— |
725 |
— |
725 |
|||||||||||||||
Net cash provided by (used in) financing activities |
381,473 |
(126,163) |
(100,895) |
1,202,082 |
470,912 |
|||||||||||||||
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash |
21,883 |
(13,528) |
(2,963) |
8,766 |
(33,907) |
|||||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
466,480 |
(217,159) |
(270,800) |
1,259,009 |
(823,097) |
|||||||||||||||
Cash, cash equivalents and restricted cash at beginning of period |
1,420,133 |
1,637,292 |
898,404 |
627,604 |
1,450,701 |
|||||||||||||||
Cash, cash equivalents and restricted cash at end of period |
$ |
1,886,613 |
$ |
1,420,133 |
$ |
627,604 |
$ |
1,886,613 |
$ |
627,604 |
||||||||||
Supplemental cash flow information: |
||||||||||||||||||||
Cash paid for taxes |
$ |
47,507 |
$ |
29,383 |
$ |
15,727 |
$ |
136,583 |
$ |
93,375 |
||||||||||
Cash paid for interest |
$ |
141,140 |
$ |
153,265 |
$ |
121,779 |
$ |
553,815 |
$ |
496,794 |
||||||||||
Free cash flow (negative free cash flow) (1) |
$ |
68,900 |
$ |
(74,563) |
$ |
(168,344) |
$ |
68,684 |
$ |
(1,280,699) |
||||||||||
Adjusted free cash flow (adjusted negative free cash flow) (2) |
$ |
173,765 |
$ |
(57,711) |
$ |
(122,036) |
$ |
271,980 |
$ |
(268,594) |
||||||||||
(1) |
We define free cash flow (negative free cash flow) as net cash provided by operating activities plus net cash provided by (used in) investing activities (excluding the net purchases, sales and maturities of investments) as presented below: |
|||||||||||||||||||
Net cash provided by operating activities as presented above |
$ |
529,670 |
$ |
498,994 |
$ |
558,629 |
$ |
1,992,728 |
$ |
1,815,426 |
||||||||||
Net cash used in investing activities as presented above |
(466,546) |
(576,462) |
(725,571) |
(1,944,567) |
(3,075,528) |
|||||||||||||||
Purchases, sales and maturities of investments, net |
5,776 |
2,905 |
(1,402) |
20,523 |
(20,597) |
|||||||||||||||
Free cash flow (negative free cash flow) |
$ |
68,900 |
$ |
(74,563) |
$ |
(168,344) |
$ |
68,684 |
$ |
(1,280,699) |
||||||||||
(2) |
We define adjusted free cash flow (adjusted negative free cash flow) as free cash flow (negative free cash flow) as defined above, excluding any purchases of real estate and business acquisitions, net of cash and restricted cash acquired as presented below: |
|||||||||||||||||||
Free cash flow (negative free cash flow) as defined above) |
$ |
68,900 |
$ |
(74,563) |
$ |
(168,344) |
$ |
68,684 |
$ |
(1,280,699) |
||||||||||
Less business acquisitions, net of cash and restricted cash acquired |
— |
— |
502 |
34,143 |
829,687 |
|||||||||||||||
Less purchases of real estate |
104,865 |
16,852 |
45,806 |
169,153 |
182,418 |
|||||||||||||||
Adjusted free cash flow (adjusted negative free cash flow) |
$ |
173,765 |
$ |
(57,711) |
$ |
(122,036) |
$ |
271,980 |
$ |
(268,594) |
||||||||||
EQUINIX, INC. |
||||||||||||||||||||
Non-GAAP Measures and Other Supplemental Data |
||||||||||||||||||||
(in thousands) |
||||||||||||||||||||
(unaudited) |
||||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
||||||||||||||||
Recurring revenues |
$ |
1,337,977 |
$ |
1,319,336 |
$ |
1,230,318 |
$ |
5,238,186 |
$ |
4,776,502 |
||||||||||
Non-recurring revenues |
79,158 |
77,474 |
79,765 |
323,954 |
295,152 |
|||||||||||||||
Revenues (1) |
1,417,135 |
1,396,810 |
1,310,083 |
5,562,140 |
5,071,654 |
|||||||||||||||
Cash cost of revenues (2) |
477,144 |
464,950 |
445,995 |
1,851,458 |
1,696,436 |
|||||||||||||||
Cash gross profit (3) |
939,991 |
931,860 |
864,088 |
3,710,682 |
3,375,218 |
|||||||||||||||
Cash operating expenses (4)(7): |
||||||||||||||||||||
Cash sales and marketing expenses (5) |
100,430 |
98,117 |
99,613 |
401,877 |
382,489 |
|||||||||||||||
Cash general and administrative expenses (6) |
163,701 |
159,041 |
147,280 |
621,078 |
579,489 |
|||||||||||||||
Total cash operating expenses (4)(7) |
264,131 |
257,158 |
246,893 |
1,022,955 |
961,978 |
|||||||||||||||
Adjusted EBITDA (8) |
$ |
675,860 |
$ |
674,702 |
$ |
617,195 |
$ |
2,687,727 |
$ |
2,413,240 |
||||||||||
Cash gross margins (9) |
66 |
% |
67 |
% |
66 |
% |
67 |
% |
67 |
% |
||||||||||
Adjusted EBITDA margins (10) |
48 |
% |
48 |
% |
47 |
% |
48 |
% |
48 |
% |
||||||||||
Adjusted EBITDA flow-through rate (11) |
6 |
% |
(20) |
% |
18 |
% |
56 |
% |
51 |
% |
||||||||||
FFO (12) |
$ |
304,025 |
$ |
331,485 |
$ |
332,810 |
$ |
1,314,556 |
$ |
1,253,120 |
||||||||||
AFFO (13) (14) |
$ |
472,611 |
$ |
472,744 |
$ |
414,145 |
$ |
1,931,122 |
$ |
1,659,097 |
||||||||||
Basic FFO per share (15) |
$ |
3.56 |
$ |
3.90 |
$ |
4.13 |
$ |
15.62 |
$ |
15.71 |
||||||||||
Diluted FFO per share (15) |
$ |
3.54 |
$ |
3.87 |
$ |
4.12 |
$ |
15.52 |
$ |
15.63 |
||||||||||
Basic AFFO per share (15) |
$ |
5.54 |
$ |
5.56 |
$ |
5.14 |
$ |
22.95 |
$ |
20.80 |
||||||||||
Diluted AFFO per share(15) |
$ |
5.51 |
$ |
5.52 |
$ |
5.13 |
$ |
22.81 |
$ |
20.69 |
||||||||||
(1) |
The geographic split of our revenues on a services basis is presented below: |
|||||||||||||||||||
Americas Revenues: |
||||||||||||||||||||
Colocation |
$ |
443,991 |
$ |
441,596 |
$ |
438,150 |
$ |
1,769,654 |
$ |
1,732,998 |
||||||||||
Interconnection |
149,474 |
146,212 |
137,031 |
576,709 |
532,163 |
|||||||||||||||
Managed infrastructure |
21,485 |
24,082 |
20,070 |
90,262 |
75,595 |
|||||||||||||||
Other |
5,020 |
3,392 |
5,350 |
19,743 |
16,570 |
|||||||||||||||
Recurring revenues |
619,970 |
615,282 |
600,601 |
2,456,368 |
2,357,326 |
|||||||||||||||
Non-recurring revenues |
33,696 |
29,993 |
37,547 |
131,359 |
127,408 |
|||||||||||||||
Revenues |
$ |
653,666 |
$ |
645,275 |
$ |
638,148 |
$ |
2,587,727 |
$ |
2,484,734 |
||||||||||
EMEA Revenues: |
||||||||||||||||||||
Colocation |
$ |
359,423 |
$ |
357,201 |
$ |
315,118 |
$ |
1,395,544 |
$ |
1,201,769 |
||||||||||
Interconnection |
44,350 |
41,063 |
35,288 |
161,552 |
138,874 |
|||||||||||||||
Managed infrastructure |
28,495 |
27,651 |
29,881 |
113,631 |
118,685 |
|||||||||||||||
Other |
3,458 |
1,787 |
1,482 |
10,019 |
8,164 |
|||||||||||||||
Recurring revenues |
435,726 |
427,702 |
381,769 |
1,680,746 |
1,467,492 |
|||||||||||||||
Non-recurring revenues |
28,063 |
30,438 |
21,315 |
125,698 |
95,145 |
|||||||||||||||
Revenues |
$ |
463,789 |
$ |
458,140 |
$ |
403,084 |
$ |
1,806,444 |
$ |
1,562,637 |
||||||||||
Asia-Pacific Revenues: |
||||||||||||||||||||
Colocation |
$ |
219,306 |
$ |
214,304 |
$ |
191,891 |
$ |
857,009 |
$ |
735,404 |
||||||||||
Interconnection |
41,180 |
39,495 |
34,917 |
155,328 |
130,928 |
|||||||||||||||
Managed infrastructure |
21,795 |
22,553 |
21,140 |
88,735 |
85,352 |
|||||||||||||||
Recurring revenues |
282,281 |
276,352 |
247,948 |
1,101,072 |
951,684 |
|||||||||||||||
Non-recurring revenues |
17,399 |
17,043 |
20,903 |
66,897 |
72,599 |
|||||||||||||||
Revenues |
$ |
299,680 |
$ |
293,395 |
$ |
268,851 |
$ |
1,167,969 |
$ |
1,024,283 |
||||||||||
Worldwide Revenues: |
||||||||||||||||||||
Colocation |
$ |
1,022,720 |
$ |
1,013,101 |
$ |
945,159 |
$ |
4,022,207 |
$ |
3,670,171 |
||||||||||
Interconnection |
235,004 |
226,770 |
207,236 |
893,589 |
801,965 |
|||||||||||||||
Managed infrastructure |
71,775 |
74,286 |
71,091 |
292,628 |
279,632 |
|||||||||||||||
Other |
8,478 |
5,179 |
6,832 |
29,762 |
24,734 |
|||||||||||||||
Recurring revenues |
1,337,977 |
1,319,336 |
1,230,318 |
5,238,186 |
4,776,502 |
|||||||||||||||
Non-recurring revenues |
79,158 |
77,474 |
79,765 |
323,954 |
295,152 |
|||||||||||||||
Revenues |
$ |
1,417,135 |
$ |
1,396,810 |
$ |
1,310,083 |
$ |
5,562,140 |
$ |
5,071,654 |
||||||||||
(2) |
We define cash cost of revenues as cost of revenues less depreciation, amortization, accretion and stock-based compensation as presented below: |
|||||||||||||||||||
Cost of revenues |
$ |
725,636 |
$ |
704,339 |
$ |
670,935 |
$ |
2,810,184 |
$ |
2,605,475 |
||||||||||
Depreciation, amortization and accretion expense |
(241,753) |
(232,285) |
(219,799) |
(933,371) |
(890,792) |
|||||||||||||||
Stock-based compensation expense |
(6,739) |
(7,104) |
(5,141) |
(25,355) |
(18,247) |
|||||||||||||||
Cash cost of revenues |
$ |
477,144 |
$ |
464,950 |
$ |
445,995 |
$ |
1,851,458 |
$ |
1,696,436 |
||||||||||
The geographic split of our cash cost of revenues is presented below: |
||||||||||||||||||||
Americas cash cost of revenues |
$ |
184,029 |
$ |
182,516 |
$ |
184,545 |
$ |
729,100 |
$ |
710,683 |
||||||||||
EMEA cash cost of revenues |
187,972 |
180,370 |
161,781 |
720,890 |
629,853 |
|||||||||||||||
Asia-Pacific cash cost of revenues |
105,143 |
102,064 |
99,669 |
401,468 |
355,900 |
|||||||||||||||
Cash cost of revenues |
$ |
477,144 |
$ |
464,950 |
$ |
445,995 |
$ |
1,851,458 |
$ |
1,696,436 |
||||||||||
(3) |
We define cash gross profit as revenues less cash cost of revenues (as defined above). |
|||||||||||||||||||
(4) |
We define cash operating expense as selling, general, and administrative expense less depreciation, amortization, and stock-based compensation. We also refer to cash operating expense as cash selling, general and administrative expense or "cash SG&A". |
|||||||||||||||||||
Selling, general, and administrative expense |
$ |
406,060 |
$ |
403,386 |
$ |
367,950 |
$ |
1,586,064 |
$ |
1,460,396 |
||||||||||
Depreciation and amortization expense |
(86,542) |
(89,461) |
(85,331) |
(351,925) |
(335,949) |
|||||||||||||||
Stock-based compensation expense |
(55,387) |
(56,767) |
(35,726) |
(211,184) |
(162,469) |
|||||||||||||||
Cash operating expense |
$ |
264,131 |
$ |
257,158 |
$ |
246,893 |
$ |
1,022,955 |
$ |
961,978 |
||||||||||
(5) |
We define cash sales and marketing expense as sales and marketing expense less depreciation, amortization and stock-based compensation as presented below: |
|||||||||||||||||||
Sales and marketing expense |
$ |
160,556 |
$ |
161,574 |
$ |
161,804 |
$ |
651,046 |
$ |
633,702 |
||||||||||
Depreciation and amortization expense |
(47,659) |
(47,663) |
(48,723) |
(192,450) |
(197,765) |
|||||||||||||||
Stock-based compensation expense |
(12,467) |
(15,794) |
(13,468) |
(56,719) |
(53,448) |
|||||||||||||||
Cash sales and marketing expense |
$ |
100,430 |
$ |
98,117 |
$ |
99,613 |
$ |
401,877 |
$ |
382,489 |
||||||||||
(6) |
We define cash general and administrative expense as general and administrative expense less depreciation, amortization and stock-based compensation as presented below: |
|||||||||||||||||||
General and administrative expense |
$ |
245,504 |
$ |
241,812 |
$ |
206,146 |
$ |
935,018 |
$ |
826,694 |
||||||||||
Depreciation and amortization expense |
(38,883) |
(41,798) |
(36,608) |
(159,475) |
(138,184) |
|||||||||||||||
Stock-based compensation expense |
(42,920) |
(40,973) |
(22,258) |
(154,465) |
(109,021) |
|||||||||||||||
Cash general and administrative expense |
$ |
163,701 |
$ |
159,041 |
$ |
147,280 |
$ |
621,078 |
$ |
579,489 |
||||||||||
(7) |
The geographic split of our cash operating expense, or cash SG&A, as defined above, is presented below: |
|||||||||||||||||||
Americas cash SG&A |
$ |
155,561 |
$ |
156,103 |
$ |
151,279 |
$ |
621,005 |
$ |
590,220 |
||||||||||
EMEA cash SG&A |
69,072 |
65,252 |
59,813 |
257,574 |
234,504 |
|||||||||||||||
Asia-Pacific cash SG&A |
39,498 |
35,803 |
35,801 |
144,376 |
137,254 |
|||||||||||||||
Cash SG&A |
$ |
264,131 |
$ |
257,158 |
$ |
246,893 |
$ |
1,022,955 |
$ |
961,978 |
||||||||||
(8) |
We define adjusted EBITDA as income from operations excluding depreciation, amortization, accretion, stock-based compensation, restructuring charges, impairment charges, transaction costs and gain or loss on asset sales as presented below: |
|||||||||||||||||||
Income from operations |
$ |
312,974 |
$ |
285,368 |
$ |
270,717 |
$ |
1,169,631 |
$ |
977,383 |
||||||||||
Depreciation, amortization and accretion expense |
328,295 |
321,746 |
305,130 |
1,285,296 |
1,226,741 |
|||||||||||||||
Stock-based compensation expense |
62,126 |
63,871 |
40,867 |
236,539 |
180,716 |
|||||||||||||||
Impairment charges |
(233) |
1,189 |
— |
15,790 |
— |
|||||||||||||||
Transaction costs |
16,545 |
2,991 |
481 |
24,781 |
34,413 |
|||||||||||||||
Gain on asset sales |
(43,847) |
(463) |
— |
(44,310) |
(6,013) |
|||||||||||||||